Lamont derails Tory unity

THE Chancellor, Kenneth Clarke, and his predecessor, Norman Lamont, have clashed on the eve of the Conservative Party conference amid rising tensions over tax, spending and likely extensions of VAT.

Ignoring calls for party unity, Mr Lamont reopened the bitter argument over whether the Government's budget difficulties should be tackled by spending cuts or tax increases. Siding firmly with the right, he insisted, in an article in a Conservative presssure group's magazine, Forward, that the deficit should be tackled 'on the spending side' and argued that there was 'nothing sacrosanct' about this year's Government spending target.

Mr Clarke, meanwhile, writing in the party's official newspaper, Conservative Newsline, defended spending on health, the police, education and training, declaring: 'Neither I nor my Cabinet colleagues were prepared to see us cutting back on the health service, or reducing the resources the police used to fight rising crime.'

On unemployment, he said: 'No-one would have suggested that we should reduce spending in this area nor would we have considered doing so.' Ministers insist that the spending target cannot now be revised.

With Mr Major's leadership on trial, party managers were given a fillip when Lady Thatcher called for a change in the Conservative Party election rules to prevent an incumbent Prime Minister being toppled.

In what will be seen as a statement of support for her successor, Lady Thatcher said in an interview: 'I think they (the Tories) must think about this very carefully and ponder very deeply on whether (the rules for) an election for the leader of the party should apply during a time when that leader is also Prime Minister.'

But Mr Lamont's article, which spoke waspishly of his confidence that the Tories 'can regain a sense of direction', began the week on a note of conflict over economic policy. The former Chancellor said: 'It has been argued that it is politically impossible to cut spending . . . I reject this.' He also argued that the party would be 'on dangerous grounds if we argue that we cannot implement the policies we believe in because of the size of our majority'.

In the same publication Michael Portillo, Chief Secretary to the Treasury, struck a markedly different tone to Mr Clarke, arguing that the 'spends too much of its citizens' money'. He added: 'Over time we must rethink what provision should be made for the contingencies of life by the state and what by the individual', he said.